Is Seasonality Out the Door in Long Island?

If you think this weather is crazy, what about what’s happening in real estate? We’re not sure whether to call it “home warming” or “real estate change,” but it’s something to believe in.  Median sale prices for single family homes in Nassau County increased for the second month in a row in January, but looking at the strange path prices took last year, it’s pretty much impossible to describe the market as having much at all to do with the seasons we learned about in grade school. Redfin’s Nassau County agent Caitlin Mooney explains that, “after the last couple of harsh winters, we’ve been treated to some very mild weather the last few months, so the buyers just never retreated to their holiday breaks or winter hibernation.”

Redfin’s tour data supports Caitlin’s notion, showing that Redfin’s buyers did exhibit the typical summer rush on homes in July, but they just never took going into the fall or winter months as we would have expected them to in a normal year. If tour numbers and demand stay where they are or even increase at all, we can expect prices to continue on their upward climb into what are commonly referred to as the spring months.

For a complete picture of the local market’s most recent stats and trends, download the Redfin Market Report here: Redfin-New-York-Real-Estate-Market-Report-January-2012. Want to know how the Long Island real estate market is doing compared with the rest of the country? Take a look at the Redfin Heat Index:

*Redfin Heat Index Methodology

The Redfin Heat Index (Beta) uses listings, sales, and price changes to determine the relative “heat” of a given real estate market. We set a baseline Heat Index of 75.0 at 6.0 months of supply and +5 % price change year-over-year.
Every percentage point increase in prices above the 5% baseline will increase the heat index by two points, every percentage point decrease in prices below the 5% baseline will decrease the heat index by two points.
Every one month of supply increase above the 6.0 baseline will decrease the heat index by seven points, every one month of supply decrease below the 6.0 baseline will increase the heat index by seven points.
Here’s the formula:

  • MOS = Months of Supply: End of Month Inventory / Closed Sales in the Month
  • $YOY = Year-over-year change in the median price per square foot.
  • Heat Index = ((MOS – 6.0) * 7) + (($YOY – 5%) * 2) + 75
  • Mike Gavone

    According to the Redfin NY market real estate report the median sales price of a home in Nassau is down 6.25% year over year and in Suffolk County it is down over 7.5%. Comparing month to month data is virtually useless. Calling this “something to believe in” is almost laughable. Home prices on Long Island are still very expensive when you use traditional metrics such a price to income or price to rent ratios.

  • Dana Atchley

    Better late than never; prices on L.I. have been, and will be for the foreseeable future, higher than national prices based on the traditional metrics used elsewhere – the “virtually useless” comparison is trying to measure the L.I. real estate market using metrics and benchmarks derived from other very different markets.  In other words, the fact that apples may cost $1/lb in Peoria, Ill has no bearing on whether oranges at $3/lb on L.I. are cheap or expensive.